Ford to build green engine in Wales

By John Willman, Business Editor
Published: October 28 2008 18:05

Ford of Europe is defying the gloom hanging over the motor industry with a £70m investment in Wales to produce the first of a generation of green petrol engines.
The EcoBoost engines, which are 20 per cent more fuel efficient and emit 15 per cent less carbon dioxide, will be made for the global Ford network only at the carmaker’s Bridgend factory.

The investment was secured with £13.4m in support from the Welsh assembly and will raise output above 1m units a year. It will also increase jobs at the Bridgend factory, the third-largest private sector employer in Wales, to more than 2,000.
The announcement follows a series of profit warnings from the big global car manufacturers, which have been cutting output and staff after a sharp decline in sales caused by the credit crunch.
Component manufacturers have followed suit, with GKN this week saying it would close plants and introduce short-time working for many of its 30,000 staff worldwide. Sales in its automotive division would be 15 per cent below last year in the final three months of 2008, GKN said – and predicted sales would fall 8 per cent next year.
All the UK’s large carmakers have revealed plans to reduce output for the rest of the year, with Ford introducing a four-day week at its Southampton Transit van factory. But its engine plants at Bridgend and Dagenham have not faced cuts, as demand remains buoyant for their smaller engines as drivers trade down to more fuel-efficient cars.
The Ford investment was welcomed by Rhodri Morgan, Wales’s first minister, as a tribute to the technical skills developed at Bridgend and the good working relations in the plant.
“The factory was opened 28 years ago amid the doom and gloom of the early 1980s. This investment probably means Ford will be making engines here for another 28 years.”
Mr Morgan said it was particularly pleasing that Bridgend would be the only source of the the EcoBoost, a new category for Ford. The 1.6-litre engines, which go into production in two years, provide an environmentally friendly alternative to hybrid engines and diesels, and utilise a range of fuel-efficiency technologies.
Unemployment in Wales, once a blackspot after the closure of the mines and much of the steel industry, is now 5.9 per cent, only slightly above the UK average of 5.7 per cent. Other car component manufacturers to have come to Wales include Takao, the Japanese company which has invested £15m in a plant acquired last year at Ebbw Vale and created about 100 jobs.
Copyright The Financial Times Limited 2008